The Florentine resistance comes three months after the city council issued a decree to limit kebab shops, "mini-markets" and convenience stores popping up all over the historic centre.
In what one Italian newspaper described as a "gastro-crusade", the city ruled that new businesses have to source at least half their products from Tuscany to preserve local traditions and uphold Florence's identity.
McDonald's was reportedly happy to abide by the new rules, saying the new outlet, to be installed in a former sports equipment store, would serve 50 per cent locally sourced food and would feature table service.
But that was not enough to convince many Florentines, who say the historic centre is being ruined by fast food outlets and garishly lit corner shops, many of them run by Asian immigrants.
McDonald's says it is now considering taking legal action to challenge the city council.
"For months we have been talking to the mayor and the council, who even complimented us on our plans. Why these insults now? Politics seems to lie behind it," Roberto Masi the head of McDonald's in Italy, told La Repubblica newspaper. "We will consider legal avenues if we can't reach an agreement."
The bunfight has divided the city, with some happy to see the golden arches near the Duomo, or cathedral.
"I will still opt for good trattorias but if the younger generation love McDonald's, then I see no problem with having one near the Duomo," said Cesare Prandelli, former coach of Fiorentina, the local football team, as well as the national squad.
But Erminno Scervino, a stylist based in Florence, said: "It would be as if a beautiful woman ...decided to go out with one finger stuck up her nose. Historic locations need to be respected."
The city council is expected to make a final decision during the northern summer.